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How to Evaluate Proposals to Address Expiring Premium Tax Credit Enhancements
With just weeks to go until the premium tax credit (PTC) enhancements expire — which would increase Affordable Care Act (ACA) marketplace enrollees’ annual premiums by more than $1,000 on average — members of Congress have floated proposals ranging from cleanly extending the enhancements to making major structural changes that would raise people’s costs and leave many uninsured. As proposals claiming to address expiring PTC enhancements continue to surface, they should be evaluated based on the extent to which they:
- preserve existing coverage levels and avoid leaving more people uninsured;
- ensure people keep access to affordable, comprehensive coverage; and
- can take effect quickly.
Preserve existing coverage levels and avoid leaving more people uninsured: Proposals that increase marketplace enrollees’ premiums (after taking into account premium credits) will result in more people becoming uninsured. If the enhancements expire completely, the Congressional Budget Office estimates that 3.8 million people will lose marketplace coverage and become uninsured. This is against the backdrop of the harmful megabill that Republicans enacted earlier this year, which cuts Medicaid, Medicare, and marketplace coverage and is projected to leave an additional 10 million people uninsured in 2034.
Proposals that would eliminate $0 premium plans — which have been instrumental in providing a pathway to affordable coverage for people with very low incomes who are ineligible for Medicaid — would increase financial and administrative burdens and make it more likely that people with low incomes lose coverage or are covered for fewer days per year. Nearly 1 million marketplace enrollees would lose coverage if they were required to pay even a few dollars a month, according to an estimate from the Brookings Institution.
Ensure people keep access to affordable, comprehensive coverage: Although their designs vary widely, all ACA marketplace plans currently provide financial protections in the form of limited deductibles and annual out-of-pocket spending limits. People with income at 250 percent of the federal poverty level ($37,650 for an individual) and below qualify for cost-sharing reductions (CSRs) that provide even stronger protections against large health care bills and medical debt.
Proposals to replace these protections with cash or health savings account (HSA) deposits or to use federal dollars to drive people into less-comprehensive coverage (e.g., bronze plans, see graphic) would leave people vulnerable to high out-of-pocket costs. They’d also take federal resources away from people with more health care needs to give cash or HSA deposits to people with fewer needs.
Can take effect quickly: The 2026 coverage year begins on January 1, 2026, and the ability for millions of enrollees to maintain coverage hangs in the balance. Each day that passes without an extension to the PTC enhancements drives more people away from marketplace coverage, and it will be hard to get them back.
Proposed changes to marketplace policy — including to the PTCs and premium payment requirements, CSRs, benefits, and HSAs — vary in complexity, but nearly all would be structural and impossible to implement quickly. Significant changes would take time and resources for marketplaces to develop policies and operationalize, and would require yet more time to explain to enrollees (which would be especially difficult in HealthCare.gov states, where the Administration slashed federal funding for enrollment assistance by 90 percent).
Extending the PTC enhancements, in contrast, would be far simpler because they are in place until the end of 2025 and could be restored quickly for people purchasing 2026 coverage. If legislation also grants people more time to enroll for 2026, they will be able to return to the marketplace, assess their new options, and secure coverage.
A clean extension would be the best outcome for the more than 20 million people whose coverage and costs are hanging in the balance, and there is still time for Congress and President Trump to act.